1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

M COM – III SEMESTER

PROJECT APPRAISAL AND FINANCE 

Duration: 3Hrs.                                                                                     Max. Marks: 80

 

Note – Your Answers should be brief & related to the Marks allotted

Practical reference to examples will be given due credit in Section B & C

 

SECTION – A

1. Answer any Four Questions in brief.                                ( 4×5=20)

 

• What do you understand by Ring-fenced & non-recourse Funding ?
• List out Five types of Projects & indicate the Parameters which determine the types.
• List out any two types of Equity & Three types of Debt.
• Briefly outline the possibility of Conflict between Sponsors & Financial Institutions.
• List out any Five Risks which a Company has to face during Operations & Completion & indicate who are expected to bear them.
• List out any Five Drawbacks of strictly following a Project Finance Structure.

 

Section – B

1. Answer any THREE questions, with details of a Practical Project you are referring to:                                                                                         (3×10=30)

 

• Choose a Project, list out any Ten Activities within Three Stages & present the same in the Form of a Responsibility Matrix.
• Choose a Project, identify any Three External & Two Internal Risks & explain how these risks could be mitigated through proper Planning of Financing.
• Explain with a table to highlight the possibility of Risk Contamination in a Project & how they can be handled by the Project Sponsors.
• Choose a Project & explain with a Diagram either a BOT or a Contractual Project finance Structure.

 

 

 

Section –C

 

III. Case Study  – Compulsory question.                                        (30 marks)

The Ministry of Civil Aviation is planning to improve Five Medium-sized Airports in India and is considering the following Options:

 

1. Entrusting the entire Project to a single Company.
2. Identifying Five different Companies for the Five Airports.
3. Identifying one Company for the Airports & another for the Infrastructure around & leading to the Airport.
4. Identifying one Company each for the Terminal Buildings, Runways, ATC, Infrastructure etc.

 

Firstly, choose any one of the above as the best for this Project & briefly justify the same.

 

Secondly, analyse & recommend the best combination for Financing the Project through any Five of the following Concepts / Methods:.

 

• Balancing between Off-take & Input Supply Contracts
• Project Structure with an SPV as the Core
• Combination of Project Finance & Corporate Finance
• PPP
• Risk Allocation with the help of a Diagram
• Inclusion of O&M ( to secure Equity & maintain Continuity of revenue )
• Approach IFC or World Bank ( Five benefits to be listed out )
• Analysis of Return Variance Vs. Size of Project ( with the help of a Graph )

 

 

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